In the summer of 1998, while conducting a trial run for NIVEA lotion&cream production, Gusko, the president of BDF Korea, visited to LCC. The main agenda of the meeting was "Could you manufacture and supply a Lip-care(including Lotion&Cream) to BDF?" Since Lip-care(Lip-balm) for Lip protection has never been manufactured or produced in LG Company, and I have never used it personally, I am an 'layman' in facilities, production process, and quality control in Lip-Care. Unlike developed countries, demand and sales of lip care for lip health have not been generalized and the market has not been formed. I looked around and found that it was similar to the lipstick manufacturing process, so I ordered and prepared a small Mixer/Charged Mold and a manual Blister machine.

Mixer for semi-finished products is also a simple blending machine with a mobile stirrer attached to a measuring tube, and after production, it was all about making a 20-25kg plate-like cake on the tray. It was a manual process in which solidified cake was melted in a heater and molded into a hand-operated mold, solidified in a refrigerator, and packaged in a manual blister packaging machine. The productivity line was also manually processed in the corner of the lotion plant. In 2002, when the number of lip-care manufacturing quantity increased 200 thousands to one million units per year, I decided to establish additional plant(3rd Plant) for Lip-Care.

Sales of NIVEA Lip-Care soared with the establishment of third plant, reaching 10 million units per year since 2006. Prior to the introduction of NIVEA Lip-care, 3~4million 'SANG A Pharmaceutical' lip-care were supplied annually and control the domestic lip-care market. However, NIVEA's quality, design and price competitiveness have almost taken over the market, and it is estimated that it will now be over 50% of Market Share.

In order to improve Lip-care's quality and productivity, we have also developed and installed facilities for expansion and automation. The capacity of the manufacturing mixer was also increased to 300-500kg. Also we accomplished a INNOVATION changing the plate-like cake-melting method to install a intermediate storage tank (500 kg) which supply semi-finished products from the second floor to the first floor for continuous production. Charging has also been changed from manual charging to rotary charging and refrigerator cooling, but in order to improve quality uniformity and productivity, charging, cooling, and blow-down been improved to in-line for continuous, and automated.

The packaging broke the old-method(manual process), and the first automatic Blister machine, which is used in toothbrushes and battery product packaging, was introduced in Korea first time in 2002. It played a critical role in enhancing the price competitiveness.

 The Vaseline Lip-Care, which is released in March 2018, has shown a impressive respond in overseas markets, especially in the US and Southeast Asia. So we carried out a large scale of extension on productivity(35million units per year) in 2019. This Lip-care was developed ODM by leadership of Yoon-Joo Oh, the team leader of the R&D, has been highly evaluated for its softness and fragrance, and has come to be positioned as an export item with quality and price competitiveness.

The US market size is around 200 million units (about 1 billion dollars per year), Chapstick leads the market with 70 million units, followed by Carmex, Burt's Bees, Blistex and others.

  Vaseline Lip-care(VLC) has entered to Walmart, Amazon, Dollar Tree and Dollar General, and has received an explosive reputation based on its quality and price competitiveness, and plans to enter to CVS through the development of Non Blister Packing. Therefore, if 50 to 60 million VLC are exported to U.S. Market after the expansion of productivity, it will be the well-know brand which will be competing with Chapstick.

 Looking at the major U.S Lip-Care brands, Chapstick, which was developed for the first time in the world in 1880, is leading the market. Based in Richmond, Chapstick has a 140-year history and earn the popularity in Asia market as well with a variety of products with top-filling method.

Carmex, which is famous for developing inflammatory ointment for lips, and Blistex, which is the family company, are both famous companies with more than 80 years history. Burt's Bees, which sells for more than double the price of ordinary products, was established in 1991, and has received favorable reviews from consumers due to its natural prescription that uses more than 99% of natural ingredients.

For the production and export of Lip Care, the quality and price competitiveness of the auxiliary materials, Cap/Mechanic, must be the most important and sufficient. We concluded that domestic supply was impossible due to the rapid increase in the minimum wage, and we searched several companies in China for a long time, of which OMI company was selected. The quality level at the time of the first transaction was very poor, but the quality improved significantly while the order volume of 100,000-200,000 units per month soared to 500thousands~1 million units. The factory has been relocated and expanded on a large scale, and various facilities(including molds) have been added. The number of injection machines increased from 4 to 24, the number of granulating machine increased to two automatically, and the number of automatic printing machines increased to 4. So that the productivity of Lip-care's auxiliary materials increase more than 10 times from 500 thousands to six million units per month.

We supported to OMI about hundreds of thousands of dollars in funds for expand the plant, and give a technical guidance through field-visit to dramatically improved the quality of quality. Unlike ordinary Chinese, Carl, the president of OMI, has a strong sense of trust and drive, has put a lot of effort into quality improvement, and has shown bold determination to expand facilities.

The explosive increase in exports prompted 'Unilever Korea' to demand additional expansion and finally decide to increase productivity to set up a packaging facility on the third floor of new plant(5th plant). Existing Lip-Care plant(3rd plant) produce charged products by measurement, manufacture, and charge, and new plant (5th plant) produce finished products by Blister packaging, enabling CAPA to be increased 100%.

By converting existing product warehouse into sub-material warehouse for storing imported caps and mechanics. And we installed racks in new warehouse for manage efficiently through LOT management. If necessary, we could install packaging lines on the third floor and additional charging lines in the empty space on the first floor. it could increase the productivity from 70 million to 100 million units per year (as of 8 hours per day).

Byung-ho Park, the plant manager, is the biggest contributor to the establishment of 5th Plant. This Plant's Lip-Care productivity is about 70 million units per year, twice as many as Capacity in just five months. Without Park's precise preparation such as the Lay-out and Utility plan for new plant, this Project(5th Plant establishment)could not be carried out. Jo-young Jeong, also played a major role in the preparation with meticulously design such as installed the rack in warehouse. I would also like to express my gratitude to Sang-hyun Han for promoting the expansion of the supply and demand of Cap/Mechanic and expansion of factory of OMI as planned.

Our dreams and Vision are to realize "Being 100 Years company through Export", and we have made a progress step by step. We acheived a $10 million export record in 2019 and will achieve $20 million export record in 2021. We will make strong progress towards $50 million export record by 2030.

Unfortunately, due to the COVID-19, the expansion of the distributors and promotion marketing activities of Auto Dispenser Mouthwash, which has been developed as a main export product, have been suspended. After Corona vaccine development will open up the U.S. market around next year, our dream of establishing an ORIOX Mouthwash Dispenser for each Fast Food restaurant will come true and our commercial location which export company will become even stronger.

CEO BAIK, SUNGCHUN